Title
Ordinance No. 20-5 amending Ordinance No. 18-118 (2019 Appropriation Ordinance) for a Supplemental Appropriation to the Memorial Health System Enterprise Fund in the Amount of $1,384,091 to Transfer UC Health Margin Share Proceeds to the Colorado Springs Health Foundation
Presenter:
Charae McDaniel, Chief Financial Officer
Chris Wheeler, Budget Manager
Body
Summary:
The attached ordinance is a supplemental appropriation to increase the 2019 budget and appropriate funds in the amount of $1,384,091 for the Memorial Health System Enterprise Fund to transfer UC Health margin share proceeds to the Colorado Springs Health Foundation (CSHF).
Background:
In November 2019, the City was notified of the margin sharing payment to be received from the University of Colorado Health, a benefit from the provisions of the lease.
The supplemental appropriation will provide the needed appropriation authorization to transfer the margin sharing payment to be received by the City to the CSHF.
Previous Council Action:
On October 1, 2012, the City of Colorado Springs executed the Memorial Health System (MHS) Operating Lease Agreement and the Integration and Affiliation Agreement by and among the City of Colorado Springs, University of Colorado Health, Poudre Valley Health Care, Inc., and UCH-MHS.
City Council authorized and directed that such funds and monies from the lease be placed into an appropriate segregated account and shall be spent only to satisfy obligations specifically provided for in the agreements. Funds remaining after satisfying the obligations shall be transferred directly into the City controlled non-profit foundation, Colorado Springs Health Foundation, as provided for under IRS Sections 501(c)(3) and 509(a) and authorized by City Council and the Mayor pursuant to Resolution No. 89-12.
On November 10, 2015, City Council adopted Resolution No. 109-15 approving the Memorial Health System/Colorado Springs Health Foundation Funds Management Agreement. The agreement provides greater clarity as to how lease proceeds will be transferred to the CSHF and how the CSHF will invest funds.
On January 12, 2016, City Council approved Ordinance No. 15-101 for a supplemental appropriation to the MHS Enterprise Fund in the amount of $1,345,000 to transfer the revenue sharing payment received by the City to the CSHF.
On September 26, 2016, City Council was notified of the intent to reduce the Funds Administration Target to $2.5 million. The original target, established by the Memorial Health System/Colorado Springs Health Foundation Funds Management Agreement approved by City Council on November 10, 2015, was $5.0 million. The City transferred the excess funds to CSHF the following day.
On December 13, 2016, City Council approved Ordinance No. 16-117 for a supplemental appropriation to the MHS Enterprise Fund in the amount of $1,217,000 to transfer the revenue sharing payment received by the City to the CSHF.
On December 12, 2017, City Council approved Ordinance No. 17-110 for a supplemental appropriation to the MHS Enterprise Fund in the amount of $1,214,210 to transfer the revenue sharing payment received by the City to the CSHF.
On December 11, 2018, City Council approved Ordinance No. 18-127 for a supplemental appropriation to the MHS Enterprise Fund in the amount of $675,475 to transfer the revenue sharing payment received by the City to the CSHF.
Financial Implications:
The supplemental appropriation increases the 2019 Memorial Health System Enterprise Fund revenue and expense budget by $1,384,091 and does not affect the General Fund balance. The source of these funds is the margin sharing proceeds from the lease of the Memorial Health System to UC Health.
City Council Appointed Board/Commission/Committee Recommendation:
N/A
Stakeholder Process:
This supplemental appropriation was discussed with the City Council Budget Committee on November 21, 2019.
Alternatives:
N/A
Recommended Action
Proposed Motion:
Move approval of an Ordinance Amending Ordinance No. 18-118 (2019 Appropriation Ordinance) for a Supplemental Appropriation to the Memorial Health System Enterprise Fund in the Amount of $1,384,091 to Transfer UC Health Margin Share Proceeds to the Colorado Springs Health Foundation
Summary of Ordinance Language
An Ordinance Amending Ordinance No. 18-118 (2019 Appropriation Ordinance) for a Supplemental Appropriation to the Memorial Health System Enterprise Fund in the Amount of $1,384,091 to Transfer UC Health Margin Share Proceeds to the Colorado Springs Health Foundation